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Jim Meade / Iowa City
Senior Advisor

How To Make Money Grain Farming?

IWhat are th elow hanging fruit for improving net worth in this grain market?

Cut costs or improve yield?  Try to market better?  How?

 

I was toying with the idea of going all corn due to projected bean prices, but I've never like corn on corn so I'm goign to stick with 50-50.  I want to hold down costs but I'm going to fertilzie beans rather than rely on corn fertilizer carry-over or mining the soil.  So far, I might be losing money.

 

I'll try to minimize equipment costs.  No new equipment.  Extra care to fix the old.  More focus on getting field work done right at the right time to optimize yields.

 

More scrutiny ofr hybrids for both performance and money.

 

More scrutiny of weed plan.  I need fewer weeds at fewer dollars.  I don't know how I'm going to do that but I'm going to work on it.

 

Marketing looks like a real challenge.  What I want to do is develop a marketing plan that will keep me out of the basement.  If I can find an inexpensive way, I want some upside potential.  What I am not going to do is wait and hope with no plan.

 

Tell mw what I'm missing.  I think I'll need all the help I can get.

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13 Replies
ECIN
Senior Advisor

Re: How To Make Money Grain Farming?

I don't know Jim - it looks like you covered most bases but one - How about renting out the ground on a 1 year contract for big bucks - all the money up front - That looks like the best way to make some money - plus you don't have to work so hard trying to figure out how to make it < AND worrying   Smiley Happy Just a thought

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BA Deere
Honored Advisor

Re: How To Make Money Grain Farming?

I don`t think the economics are there for going corn on corn in many cases. You`ll have $60/acre more in seed cost, nitrogen will be $80/acre more.  So, that`s $140/acre extra expense and that by far isn`t figuring everything ie, extra P removal, drying, trucking, tillage. 

 

Assuming that "grains will be cheap" $3 corn and $8 beans figuring 50/bu beans @ $8 that`s $400 gross.  Corn on corn yield drag 180/bu yield Xs $3 is $540 gross or $140 more than the beans or coincidentally just not quite enough to cover the extra cost of raising corn. 

 

Corn on corn worked when we had $7 corn with the $1200/acre grosses verses 50 bu beans at $13/bushel gross of $650...there it was plain to see raising corn was a no-brainer...beans barely paid the rent in some cases  Smiley Happy

 

What the next few years may come down to is how much land you own free and clear and how low you value your time that you donate to your opperation.  And to market grain in the Top 50% won`t hurt either  Smiley Happy

r3020
Senior Advisor

Re: How To Make Money Grain Farming?

Grain farming is not a full time job and it's hard to make a full time living with a part time job. If you have some barns you might want to add some cattle. Make those equipment repairs yourself instead of taking it to the dealer when they offer their "specials".  Some of those combine belts look a lot harder to replace than they actually are. Planter parts aren't that hard either. Same for some tractor repairs. If you don't know how to fix something google it and watch a couple of youtube videos. Equipment dealers are charging around $100/hr for labor, make some of that yourself. Maybe pick up some trucking hauling grain, lime, stone. Rent an excavator and clean a fence row instead of hiring it done.

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ECIN
Senior Advisor

Re: How To Make Money Grain Farming?

Jim - I will add this - around here Pot has dropped around 90 bucks a ton from last year - 28 is right about the same - I have to wonder if that will not soften up a bit , didn't check NH3 - I did spend some time with them on chemicals the day before - I did cut my fall app this year of 2-4-d and roundup out - If I come along some great plan on them I will pass them on to yeah Smiley Happy

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gurly3801539
Advisor

Re: How To Make Money Grain Farming?

ECIN, if you are buying Pot by the ton that explains alotSmiley Very Happy

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Kay/NC
Honored Advisor

Re: How To Make Money Grain Farming?

This is what reminds me that I think our history, borne out of the Great Depression, created the ASCS.  Wasn't it that deep drop in commodity prices, brought on by an imbalance in supply and demand, that fueled the decision for the " Stabilization" part...the Dust Bowl its "Conservation" twin? 

 

We raised quota crops - fluecured tobacco and peanuts - that limited how many acres or pounds of either one you could market at supported prices.  You might have never gotten rich, if all you got was the base price...with tobacco auctioned, the buyers could bid you higher...but, you never got but so poor, either. 

 

I guess there are numerous other examples ( raisins come first to mind) where farmers accept constraints on commodities they produce, to avoid peaks and valleys, thus having a smoother ride throughout their farming careers.  Have never understod why grains and beans aren't managed this way. 

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BA Deere
Honored Advisor

Re: How To Make Money Grain Farming?

Kay, in Iowa..might`ve been in the 30`s or 50`s the "NFO" had a presence in some neighborhoods.  They would literally kill hogs and dump milk to in their twisted minds keep prices up.  It didn`t work, then in the "farm crisis" of the 80`s radical communists like Tom Harkin wanted mandatory programs for corn and soybeans where you`d be given a quota how many bushels you could sell, didn`t work.  All of that is alot of crookedness at the top.

 

Dad told of a radical NFO nut in the 50`s tried to sign him up and told how harmless it was. The guy said he had "400 hogs in my opperation"  Dad knew that he didn`t just looking at his place...you can tell if a place has 400 hogs on it it they`re outdoors.  Well the NFO organizer was a crook saying he had "400 hogs' then if NFO got in power and told him he had to cut his 400 hog herd in half, it`d still be 2 times the number of hogs that he actually raised.

 

Some of the neighbors latter told Dad that they told the NFO oganizer that if he could get my Dad to sign up that they would also.  That is when I learned the lesson that `evil will flurish only if good men do nothing`.

 

Now with peanuts and tobacco, I suppose that is a "different animal" if there wasn`t quotas, a couple BTO`s could raise all of the products and the small farmers would be left out.  The 5-10 acre tobacco field kept the small Southern farmer in business.

 

The corn bean farm programs now actually encourage over-production and are a Cheap Food Policy, that`s artifically created. It`s wrecked the small Iowa hog farmer, those of us left fill a niche natural market. 

 

All these huge hog buildings that have sprung up in Iowa over the last 20 years have mostly bought feed well below the cost of production..they would have no desire to raise corn when they could buy corn 25¢ below the cost of producing it.  The small hog farmer that used to have the advantage of raising their own feed now were at a disadvantage and exited the industry. 

 

Now it`s a convoluted mess, not many farmers that are left have the skills to raise hogs farrow-to-finish any longer.  

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OKdon
Senior Contributor

Re: How To Make Money Grain Farming?

I think your history is sorely lacking.  You got a good memory though. You remember things that never even happened.

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k-289
Senior Advisor

Re: How To Make Money Grain Farming?

The   '' hog  barn  expansion ''' continues in the western corn belt with the packing capacity growth of SeaBoard  Sioux City Iowa ---  

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